LG Electronics turns a profit in fourth quarter

Industry

Published: 08 Jan. 2018, 20:34

LG Electronics turns a profit in fourth quarter

LG Electronics said Monday its earnings are estimated to have turned to the black in the fourth quarter of 2017, fueled by robust sales of home appliances and premium TVs.

The company’s operating profit is estimated at 366.8 billion won ($343 million) for the October-December period. This comes after the consumer electronics company recorded an operating loss of 35.2 billion won over the same period a year earlier, LG Electronics said in a regulatory filing.

Sales are estimated to have increased 14.8 percent over the cited period to 16.9 trillion won, it added.

The operating profit estimate fell short of the market consensus of 471 billion won compiled by Yonhap Infomax, the financial arm of Yonhap News Agency, through a survey of 17 brokerage houses.

For all of 2017, the South Korean tech giant raked in an operating profit of 2.4 trillion won, marking the second-highest performance ever posted by the firm. The record currently stands at 2009, when LG posted an operating profit of 2.6 trillion won.

In terms of sales, the company raked in 61.4 trillion won for all of 2017, marking the first time for LG to post a revenue hovering above the 60 trillion won mark on an annual basis.

LG did not offer a net profit estimate for the fourth quarter, nor breakdowns for each segment. The South Korean tech giant is set to unveil its finalized earnings later this month.

Analysts said LG benefitted from strong shipments of premium organic light emitting diode (OLED) TVs along with other high-end washers and refrigerators.

The mobile business, however, is presumed to have posted quarterly losses of around 200 billion won, analysts said, despite a slight improvement in the sales of the V30 and Q smartphones.

The company posted an operating loss for the mobile division for the 10th consecutive quarter as of the July-September period.

“It seems like [the company’s] strategy to differentiate itself [from rivals] through premium products in the TV and home appliances segment successfully lent support to the improvement of sales and profitability,” an industry insider said.

He said for 2018, LG Electronics is expected to maintain relatively sound returns on the back of the home appliances and TV businesses, although prospects for the handset division remain cloudy.

Shares of LG Electronics closed at 105,000 won on the main bourse Monday, down 5.41 percent from the previous session.

Yonhap